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“Pockets of poverty” springing up in Finland, report warns

Research for the European Commission claims that rising unemployment coupled with falling house prices will trap families on benefits, according to the newspaper group Lännen Media.

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Image: Seppo Sarkkinen / Yle

A new report for the European Commission has warned that pockets of poverty could spring up in Finland if the country does not address areas where unemployment is rising and property prices falling.

The newspaper group Lännen Media reported the findings of the research, which was carried out by the European Social Policy Network, and which highlights growing poverty caused by increasing joblessness in areas where real estate prices are falling.

If an unemployed person is unable to sell their property, they cannot move elsewhere to look for work. This causes people to become dependent on benefits, and deepens the cycle of poverty, the report says.

The report’s authors, which include Kela's head of research Olli Kangas and the head of a commission looking into welfare support, Laura Kalliomaa-Puha, claim that welfare benefits are no longer lifting families out of poverty like they used to 20 years ago.

Households in receipt of the basic welfare support payment will now live at the level of the poverty line, according to the study.

The European Commission's statistics body Eurostat defines a household as being in poverty if their income in practical terms is less than 60 percent of the average for a family of that size.

Research director Olli Kangas said that the nature of Finland’s welfare model may be changing into a more exclusive system.

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